Navigating Financial Crises: Jake Clopton's Journey to Transforming Commercial Real Estate Financing
September 24, 2024 • 31 mins
What if you had launched a financial company during the worst financial crisis of our generation and turned it into a thriving nationwide provider? Join us as Jake Clopton, founder of Clopton Capital, recounts his extraordinary journey from trading interbank hedging products to becoming a key player in the commercial real estate financing sector. Jake sheds light on his company’s evolution from scouring the market for liquidity when lending was scarce to managing deals across the country, handling everything from fixed-rate first mortgages to complex bridge and construction loans. His unique approach and expansive network of up to 150 banks give clients an unparalleled advantage in securing optimal financing terms.
Get ready to navigate the intriguing world of syndicated real estate financing with Jake as your guide. This episode dives deep into the current trends shaping the real estate market, such as the boom in new construction projects and the high capital costs that challenge general partners in structuring deals. Jake’s expertise offers a clear understanding of the shift towards non-recourse debt from private capital markets and the critical role of global underwriting by banks. Learn about the balancing act between asset security and financial liabilities, a must-know for syndicators handling multiple projects.
Finally, we explore the comprehensive commercial property services offered by Clopton Capital. Jake explains their strategic expansion into commercial property insurance, especially in high-risk areas, and their commitment to proactive insurance management. Discover how Clopton Capital is positioning itself as a one-stop shop for all commercial real estate needs, from acquisition to financing, insurance, and even 1031 intermediary services. With practical advice on connecting with Jake and his team for your next venture, this episode is packed with expert guidance to help you succeed in the commercial real estate landscape.
To learn more about Tony Johnson and Timeless visit us at:
https://timelessci.com/
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https://www.linkedin.com/in/tonytimeless/
If you would like to discuss investing in Commercial Properties create a profile and schedule a call:
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info@timelessci.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to another episode of Carolina Commercial
Real Estate Connection.
Today we have Jake Clopton withus.
Jake, thank you so much forjoining us.
Speaker 2 (00:08):
Appreciate it.
Thanks for having me on.
Speaker 1 (00:10):
Yes, sir.
So Jake is a financialintermediary for commercial real
estate.
Jake, can you tell us a bitabout how long you've been doing
this and what got you into that?
Speaker 2 (00:21):
Yeah, I've been doing this for 15 years.
That's when I started thiscompany 15 years ago, uh, which
you put the timeline backtogether.
That was during the financialcrisis, when there was credit
crisis and nobody was lendingand the idea was to start a
company to help people findfinancing.
So you can kind of see wherethe need came from, um, and
before I did this, I was tradinginterbank hedging product
(00:45):
futures, mainly three-month livewargles with Fed funds, stuff
like that.
That market kind of disappearedalong with a lot of other stuff
, and you know, we had the ideato help people find liquidity.
And here we are 15 years later.
Speaker 1 (00:59):
That's amazing.
So in the beginning, and whatis first of all, what's the name
of your company?
Could you tell?
Speaker 2 (01:05):
everybody Clopton.
Speaker 1 (01:06):
Capital, clopton Capital, okay, and you are
located out of Chicago.
That's right, he does worknationwide yeah we are
nationwide Just be aware of thatIn Carolina, awesome, awesome.
So tell me in the beginning,what was your main line of
business when you started out?
(01:27):
I know you're saying finance.
What type of deals were youfinancing in the beginning?
Speaker 2 (01:32):
Yeah, in the beginning.
So the idea in the beginningwas, because of the time period,
right, nobody could even findmoney.
Time period, right, nobodycould even find money.
So we were less concerned withlike just going and finding
deals, as the main focal pointwas just going and finding money
right, that people were lendingand anybody that was lending
(01:59):
and finding things that theywere lending on, and then
putting that out there andtelling the universe, hey,
here's what we have to lend anddeals would just come to us
because of that, because, I mean, barely anybody was lending at
all, right, so if you had money,people would just come to you.
Since that time, like, our focusis really like deals that are
(02:19):
well, my personal focus let mepreface this better is deals
that are $2 million and up Fixedrate first mortgages, bridge
loans and construction loans.
However, we do also have asmall balance platform from like
$100,000 up to $2 million,mainly geared towards like
residential, small, commercial,multifamily type investors for
(02:41):
the same stuff, fixed rate firstmortgages, bridge and
construction type investors forthe same stuff fixed rate first
mortgages, bridge andconstruction.
That's more of like almost likea fintech type platform.
It's very streamlined, but theside that I do, which is very
hands on.
Brokering of larger financingis really two million bucks and
most of the volume happensanywhere from two up to like 50
(03:02):
million volume happens anywherefrom two up to like 50 million.
Speaker 1 (03:09):
Okay, so let's walk through this on your ideal
customer and kind of to identifysomeone out there looking for
financing to see if they're aproper fit.
What are you looking for whenyou have a client come to you
looking for debt coverage?
Let's focus on building anddevelopment.
Speaker 2 (03:26):
Yeah, yeah, absolutely.
So we work with a lot ofdifferent clientele anybody from
just independent owners withone-off property or all the way
up to like you know, largercommercial real estate companies
with acquisitions officers.
Our ideal guys are somebody thatwants the widest amount of
(03:48):
access to as many debt providersas possible to get the best
terms.
To give you an example when anormal person who's just a real
estate owner and operator goesout to the market and let's just
talk about banks, for instance,they go out and say, hey, I'm
going to try to get a bank loan.
How many banks do you thinkthey really end up talking to?
Three or four, maybe at most.
(04:10):
Right, I mean pretty, prettyhard to get actually through
those guys and then also figureout like do they actually lend
on this property and you know,you may talk to a handful of
banks and come up with maybe onefirm sheet.
We take a much wider net cashapproach.
Our process is very efficientand we've just been doing this
for so long.
Some of these deals we'retalking to upwards of 150
(04:31):
different banks on any one dealInside of those banks.
We talked about three to fourdifferent loan officers inside
of each bank.
Every time you approach a loanofficer at a bank, you may get a
different answer from adifferent loan officer.
That's why we approach multipleof them.
Just today, I had one loanofficer at a bank tell me yes
and another one told me no forthe exact same deal.
(04:53):
It's just how they're feelingthat day, I guess.
So our ideal client is somebodythat wants to look at us as a
service provider to find themthe best capital out there, and
maybe they really need to focuson doing more deals and the
acquisition side and really need, like an outsourced finance
(05:14):
department, to take over thattime constraint.
That's what we do.
Speaker 1 (05:20):
Fantastic.
So let's understand a littlebit of your advantage,
comparatively speaking tosomeone going and dealing with
their local regional bank,giving you about a reach of 500
people, potentiallyunderstanding what you're saying
when you're doing a reach outinitially, compared to someone,
(05:50):
yeah, going talking to three orfour banks.
So, terms wise, are your terms,obviously, when you're shopping
that much you're able to offer,I'm assuming, better terms than
these regional banks typically.
Or is it just finding finance?
So someone that's not soexperienced and maybe he's only
(06:10):
done one or two deals andthey're looking for a third
build and let's just give anumber of 5 million on a full
development deal, so they'veacquired a piece of property,
what criteria are you lookingfor?
Does it need to be pre-leasedif they're wanting to do like an
industrial or retaildevelopment?
Walk me through that process.
Speaker 2 (06:32):
Sure, so I'll handle the first part of that question.
As far as advantages, right, Ithink you can think about it two
ways.
One, it's a two degree, it's anumbers game.
Let's say there is one optimal,you know, or the most
competitive, just deal out there, right, the lowest interest
rate, the odds of finding thatby only going to a couple of
(06:54):
banks, not very good.
Right, so we provide a muchbroader access to the market.
So just logically, you can seehow you know accessing better
terms would be done through thatway.
Right, accessing a lot morelike lenders that are out there
to you know.
I would think the other way isyou know expertise and
(07:14):
presentation and knowing wherethese banks can push you know,
just knowing how banks work andknowing what, what types of
terms we're getting from otherlenders in the markets, can help
us push banks and push them alittle bit harder.
And also we're an advocate forthe borrowers, so we can be a
little more aggressive withthese lenders than maybe the
(07:37):
borrowers want to be, becausethey're going to have a long
relationship with them goingforward.
So we can push a little harderon terms and you kind of get
these guys to open up a littlebit more and offer terms that
maybe they wouldn't if they wereworking directly with a
borrower.
So I think those are really twoof the big advantages that we
bring to the table.
As far as what type of dealswe're looking for, it kind of
(08:00):
depends on property type andwhat it is.
We do basically every propertytype, from multi-family um to,
you know, industrialself-storage, uh, which are
doing a lot of car washes,hotels, stuff like that.
Releasing is something wetypically are looking for in,
(08:20):
like retail development today,right.
So anything that that wouldn'tbe pre-leased would be
speculative.
I don't need that withmultifamily, clearly, really
don't need that with other stufflike storage, car, you know,
hotel, stuff like that.
But if we're talking aboutindustrial and retail, certainly
you know having pre-leasinggoing in is a huge advantage.
(08:42):
If you're gonna end up havingto do it spec, it's probably
just going to result in a lowerleverage point and more equity
going in to mitigate that riskfor the lender.
Speaker 1 (08:53):
Interesting, and so hotel multifamily.
Obviously you had nopre-release and going in makes
it a lot easier.
So we look a lot at retail andindustrial and, yeah, that
that's the biggest hurdle, youknow.
What about?
You know, looking at theindustrial, do you guys ever
deal with it in a speculativeterm and phasing it out?
(09:15):
So if we're looking at, youknow, let's say, a 60,000 square
foot industrial development andwe're just doing small bay flex
, you know, so those you mightpre-lease one or two spaces on
like a six unit building beforeyou break ground not going to
cover your net debt ratio.
So then something like that,what are the terms going to end
(09:37):
up looking like on a speculativebuild like that?
How much?
What's your leverage basis?
Speaker 2 (09:41):
Yeah, absolutely.
I mean a lot of this depends onwhat sub marketmarket you're in
, right, let's say we'rebuilding some industrial
building and a market whosevacancy is basically zero,
you're going to get a lot morepeople comfortable If you're
doing something that's a littlemore pioneering like, for
instance, I've seen a lot ofindustrial builds wanting to do
(10:03):
small bay stuff that in some ofthese markets is kind of
pioneering, right, and theythey're building it because
there is no supply for small bay.
But you know it's not reallyproving.
You know that there's a hugedemand for it.
I think you can make thatentrepreneurial like decision.
But you know banks still reallyyou know work on a profile right
.
They're mainly going to go offof what data is already in the
(10:23):
market.
If you're going to buildsomething speculative, typically
I see you know lenders start toget comfortable around like 60
to 65%, just a little bit lowerLTV.
So that you're right, I meanthey can hit debt service
constraints a little bit earlierand that there's more equity in
these things going in.
Just in case you know yourassumptions don't work out
(10:44):
exactly how you thought, there'sa little bit more panic going
in.
Speaker 1 (10:49):
And for someone that's looking at that, what
type of prerequisites shouldthey be prepared to bring to the
table for you to even, you know, start working as a client for
them?
Do have they had?
Have they had to have asuccessful track record of
developing and buildingsomething?
What if they are new to it?
Speaker 2 (11:09):
So typically we do see people that are building
things have a track record.
We do work with, you know,first-time developers and a lot
of times the way we're able toget around that kind of lack of
development experience is byputting together the right team
right.
So let's say, the developerscome in and say, hey, I think
it's a great idea to build someyou know small bay industrials,
(11:32):
for instance, but they have notrack record of development.
Well, we can put together or,like you know, work with them to
put together the right teamRight.
Maybe you get a GC that has arock solid GMP and they've got a
ton of experience.
And then also there's otherpeople on the team you know that
you know have tons ofexperience that they're able to
bring on as consultants fordevelopment.
(11:53):
So you can kind of build outthis kind of sphere of influence
of people with experience tomake up for that.
But at the end of the day thatis still going to be a little
bit of a concern.
I do see private lenders get alittle bit more comfortable with
just project level economicsand stuff like that, maybe with
(12:17):
a little less development,getting more comfortable with
the general contractor or theconstruction company that's
building it, especially puttinga third-party management company
in there that knows whatthey're doing.
So if that does become an issueusing a lot of lower cost of
capital lenders like banks,there may very well be some
private lenders that would pickit up.
Speaker 1 (12:39):
Fantastic.
So what he's basicallyspeculating on saying is here
he's telling us you know you'vegot to get a good resume put
together.
So when you put this teamtogether, if you're new at it,
you want to get someone with aresume already doing property
management or somebody that'salready developed or raised a
bunch of capital.
You're going to put that resumetogether.
You can get on the deal.
But you're going to need to geta couple of teammates that have
(13:00):
done something would give youthat first passage into the deal
and putting that resume of acouple of experienced team
members with you.
You might not get the full deal, might not get as much, but you
get that leverage of experienceto get the deal to go through
and then you know you can buildfrom there.
Speaker 2 (13:17):
Exactly Like saying hey, I don't have as much
experience, but my GC, it's gota ton of experience.
They have a huge balance sheet.
They're guaranteeing it getsbuilt as soon as the thing gets
built.
You know, here's my managercompany.
They've got a ton of experiencein the exact project.
They're taking over theoperations of it.
Stuff like that we can point toeveryone involved here that is
(13:40):
building or managing has a tonof experience in what they're
doing.
I think that says a lot.
It goes a long way.
Speaker 1 (13:47):
And how are you seeing the market today?
Are you having a lot of dealsgo through?
Are you hitting a lot ofroadblocks with stuff coming
through?
Speaker 2 (13:56):
We are getting a lot of stuff done.
Yeah, we're doing a ton ofconstruction right now for just
various assets.
That seems to be a lot of whatyou know where people are
finding value is, you know, newconstruction.
You know, in addition to that,we are doing just your typical
refinances and acquisitions.
(14:16):
But I think people are stillhaving a little trouble making
those numbers work on theacquisition side because of the
cost of capital.
So a lot of what we're doingtoday is construction or maybe
some value-add bridge.
As far as our deals a littlemore difficult, I would say.
There's definitely morescrutiny than there may have
been in the past, for sure, andyou have to do a little bit more
(14:40):
legwork to find the rightcapital sources to get people to
say yes, to get the deals done.
But we're absolutely busy andwe're absolutely getting stuff
done.
Speaker 1 (14:50):
Now, how are you guys ?
How is it when someone comes toyou at a capital stack where
they've got you know wherethey're doing it as a GP role
and they're bringing on limitedinvestors?
What are you doing?
Structuring deals that havepeople coming to you with that
mindset, where they're bringingprivate investors, they might
not be putting a lot of moneyinto the deal themselves.
(15:13):
How do you guys work throughthat?
Speaker 2 (15:16):
It's a good question.
So I deal with this a lot.
Right, we do a lot ofsyndicated GPLP equity
structures.
A lot of the direction we godepends on what the GP is
comfortable with.
You know, a lot of times theGPs do sell their LPs on, you
know, lower cost bank debt,which means recourse.
So if we're building somethingand the GP needs a bank loan and
(15:39):
it's got to be recourse,they're going to be on the hook
for the whole thing, even thoughthey may not with the first
deal.
But if you have a syndicatorthat's doing multiple successive
deals, you can see how, ifthey're guaranteeing the whole
(16:01):
loan but only owning a smallportion of the property, that,
like, their liabilities start tokind of outweigh their assets
pretty quickly.
So that does become a problemeventually.
The other issue there is globalunderwriting.
All these banks are going to doglobal underwriting on you as a
GP, regardless of yourownership of the property itself
(16:24):
, because you're guaranteeingall the debt.
So that does become an issue aswell.
So we do see a lot of times, ifyou know, with syndicators
again doing multipleconstruction deals or value add
deals that have, you know, nocash flow going in right, but
they do have these you knowliabilities out there that need
to get paid.
That can become an issue too.
When those things start tobecome an issue, most of the
(16:49):
syndicators I see turn toyourecourse debt, something
that's more contained on a perproperty basis, where these
lenders don't have to go intotheir global underwriting just
to make this deal work.
We do see that happen, probablylike the third or fourth deal
(17:13):
that's going on at the same timeis a need to start pushing
towards non-recourse debt, andthat's in the private capital
markets.
So that's where you're going tofind that type of stuff and
that's really where it's built.
You know the first question.
I asked somebody to reallyunderstand which direction to go
to right, because our capitalsources are banks, credit unions
(17:33):
and private debt funds for themost part.
I mean, yes, insurancecompanies and stuff too, but as
we looked at it in pie chart,the vast majority of it is banks
, credit unions and private debtfunds.
When I'm trying to determinewhich direction to go, the first
thing I ask is what does yourequity look like?
And if their answer is, oh,we're doing a GPLP, chances are
(17:59):
we're going to a private debtfund.
That's not true for everybody.
I do a lot of work for a coupleof real estate companies and
we're doing the exact opposite.
I mean it's GPLP and it's allbank debt stuff like that, and
we're definitely making thosedeals work.
It may take reaching out tomore banks to make those deals
work, because some of them justdon't get comfortable with the
globals.
Speaker 1 (18:19):
Yeah, and I've seen you know talking to a lot of
different indicators.
I've been amazed to see youknow their debt ratios.
They're, you know, three, fourhundred times their net worth on
debt and I don't understand howanybody's lending to them when
you've got that much.
Because, yeah, if somethinggoes awry, what does it matter?
(18:42):
They don't have the money andthey're signed on the debt.
Well, what does it matter?
I mean, I don't understand howanybody lends on them when they
start doing that.
Speaker 2 (18:53):
I mean it's.
You know you've got it'ssecured by an asset too, right,
so that's your first line ofdefense.
But they're really these banksare leaning on people not as
much for to just say like, oh,we'll take back the property.
What they're really after is,if there's an interest rate
(19:15):
deficiency, they want somebodyto come in with money.
Right, an interest paymentdeficiency, they want somebody
to come in with money.
And that's what they're lookingfor.
That's what they're looking forfor this guarantor Saying hey,
if this property is not makingpayments, we're looking at you
to come in with the payments.
Not necessarily.
So I mean, I think some peopleapproach it where you know,
(19:37):
whatever, sure, I'll sign on it.
But you know, you know pushcomes to shove, they're just
going to take the property.
But that's not necessarily whatthey're after.
You know, right off the bat.
I mean, eventually that willhappen, right?
You know scenarios where peopleyou know have been syndicators
(19:58):
and built up large portfoliosand have them collapse quickly
because you know you startgetting a couple of days that go
bad and it depletes yourconfidence very quickly.
Speaker 1 (20:05):
Right, and when you're that far upside down,
it's you definitely don't,wouldn't have the money to cover
those issues.
Speaker 2 (20:14):
So right, If you have a million bucks in the bank,
how many $10 million deals doesit take to go bad before you're
done?
Speaker 1 (20:29):
Right, not many.
So let's talk a little bitabout other stuff that you do.
So you not only do the lending,you guys also do some other
items.
So one of the things isinsurance.
So what type of insuranceservices do you provide?
Speaker 2 (20:37):
So I'll give you the thesis behind here, right?
So we started out as justcapital markets doing financing.
And several years back the ideawas, hey, we have at the time,
10 years worth of contacts ofcommercial real estate owners.
How else can we help these guysout?
And I took a look at a closingstatement of a deal and I was
(21:00):
like, well, first, right off thebat, there's insurance, and a
lot of times that fits reallywell in with financing.
Right, because it's a seriouscost, it's got to get done.
Insurance works hand in hand tothe lenders.
So we built out an internalcommercial property insurance
company and what we do isproperty and business insurance
for any commercial properties.
(21:21):
And what we found, especiallyrecently now, is there is a huge
need for people to approachinsurance differently.
I think for a very long timepeople were just the insurance
was an afterthought, like yeah,you got to have insurance.
I don't really understand thatwhole thing.
(21:42):
You know we just get a guy andhe gives insurance and it renews
every year, um, but what we'reseeing now is, you know that,
like kind of sitting back andjust taking those renewals.
It's not three or five percent,it's like three days before
your renewal it went up 150%,right.
So the days of just sittingthere with auto renewals, they
(22:04):
are over.
Especially in, let's say,florida.
That property insurance marketis just upside down.
Yeah, the.
Speaker 1 (22:12):
Carolinas is tough too.
I mean in Florida.
We've heard that you can't evenget insurance on these.
Speaker 2 (22:17):
A lot of people can't Try to get flood in Florida.
We've heard that you can't evenget insurance on these.
A lot of people can't try toget flood insurance in Florida.
Speaker 1 (22:20):
Yeah, and here in the Carolinas, I mean, it's doubled
.
So it's definitely something tobe conscious and aware of when
you're underwriting a property.
Speaker 2 (22:31):
Anywhere there is flood or wind.
Speaker 1 (22:36):
Yeah, those areas are getting I mean basically
anything cold, right right,those areas are getting tough
yeah and so you know is it, areyou guys able to connect with
all the carriers I get?
Speaker 2 (22:49):
I assume you're being in the area again on that, yeah
, so it's very similar to thefinance side, right, I mean
we're anary, we're an agent onthat side, so it's extremely
similar.
It's just the insurance marketis just much less transparent
than the finance side, but theprocess itself is pretty similar
.
And, yeah, I mean we have widemarket access.
(23:11):
And what we do quite often whathappens is we'll get somebody
that says, hey, I've been withthis agent for 10 years and it's
usually a pretty big company,maybe like a top five, top 10
company, and we take businessfrom those guys all the time.
Right, because if you're at acompany like that and you know,
let's say, you have like a$20,000 insurance policy,
(23:32):
honestly they don't really care,they don't really care about
that.
I mean they're just they're'treally care, they don't really
care about that.
I mean they're just they're notreally going to do a lot of
work to market it for you, youknow, year over year.
And so we quite often, you know, are doing wide marketing, you
know, for those types ofpolicies and we've taken people
from getting thinking they weregetting 100% increase to either
(23:52):
par or sometimes we've actuallybeen able to lower the rent.
It just takes the effort ofdoing it and you shouldn't just
take for granted that you'rethinking that your agent is
going to go out and market yourdeal every year.
They're not going to, they'rejust going to auto-renew it and
that's just kind of a disserviceand if you're on of that type
(24:14):
of path, you're going to end upwith really high insurance rates
.
Speaker 1 (24:19):
Now, and do you also do?
Did you say, you do businessinsurance as well?
Speaker 2 (24:23):
Yep, Any commercial insurance, property general
liability.
So we do a lot of hotels andstuff too, so you get a lot of
just general liability and workscomp and all that stuff in
there Anything that's businessor commercial insurance.
Speaker 1 (24:36):
That's awesome.
Anything that's business orcommercial insurance, that's
awesome.
And then another thing that youguys are doing that we were
discussing is you're working asa 1031 intermediary as well.
Is that correct?
Speaker 2 (24:44):
that's right.
Yeah, we are.
We are the actual qualifiedintermediary you guys got.
Speaker 1 (24:51):
You got a hands and a bunch of stuff here so, yeah,
what we're trying to do is be Bea one-stop shop.
Speaker 2 (24:59):
Right throughout the life cycle of property right.
So we're working on adding abrokerage side.
That's definitely a tougherbusiness than adding a 1031 QI,
but what we want to do is beinvolved from acquisition,
financing, insurance, all theway to disposition and then
(25:21):
transitioning from like, a 1031deferred exchange back into
another property right.
I mean, that's the ideal ofwhat we're looking to be able to
do.
Speaker 1 (25:31):
So in your brokerage, where is the?
Are you trying to go nationwidewith a brokerage side, or are
you just trying to be in Chicagoarea?
Speaker 2 (25:38):
No, no, no.
Everything we do is nationwide.
That's been the strategy fromthe beginning and it's got to
continue it.
Speaker 1 (25:44):
So interesting.
You seem to have a greatbusiness mind and business model
.
Do you work under any type ofbusiness philosophy?
Do you use EOSos likeentrepreneurial operating system
for your business, or how doyou run and operate your
business?
Do you use any certainoperating system when you with
your business?
Speaker 2 (26:05):
um, everything we do has just been put together
through experience over time.
I guess is the best way to sayit.
The way that we run things likeinterdepartmentally, like
there's no employees, you knowwe put together the different
(26:27):
departments right, likeinsurance or 1031 or solar and
all this stuff.
They're all you know.
Everybody that works for thesehas an active stake in
performance.
They're all owners of thoseindividual departments but it
all rolls back up to theumbrella company, platt Campbell
.
Speaker 1 (26:57):
I think that type of structure works the best to keep
everybody motivated and to giveour clients the best service.
Speaker 2 (27:01):
That's fantastic.
Speaker 1 (27:02):
Plus, also, I don't want employees.
Oh gosh, employees are tough.
I got a lot, but they're allgreat, everybody's great
employees here, so I canunderstand that layout, I think.
So what you're saying is you'rebasically almost a co-op of
companies all put together, inessence, partnering all with the
(27:25):
same aligned vision and purposeso you can help everyone
through the process, and it'sbasically a team membership
where you're basically referringand tackling everything all
under one branding, but they'reactually separate companies.
Speaker 2 (27:41):
That's right, and they need to be set up through
different entities because thereare different licensing for
each one of these things.
As it is regardless, so that Imean just the way that it needed
to be anyways works the bestfor what we wanted to set up.
Speaker 1 (27:54):
Well, that will.
I think that makes more sense.
I was like, goodness gracious,you guys are doing more sense.
I was like, goodness gracious,you guys are doing all these
things.
How do you niche down?
But it sounds like what we'retalking about is they're
specifically, they've got peoplethat are niched down in each
one of these areas and that'stheir sole focus, and then
they're cumulatively workingtogether so they can keep you
(28:16):
streamlined as a company andoffer you all the services.
Speaker 2 (28:19):
Exactly right, which sounds better to me than doing
it all under one umbrella.
Yeah, that's exactly right.
I mean, I definitely learnedvery early on trying to do too
many things yourself means youcan't do anything.
Well, so I really want to runone race, really right, Just
finance and then use thecontacts that we built through
(28:43):
finance to basically cover allof the supply and marketing side
of the other companies.
Right, and that's really likethe hardest thing, right, I mean
, well, you know, gettingbuilding trust, authority and
contacts and network, and oncewe have that built out, you know
, I mean you just it's reallyjust setting the other companies
(29:06):
up and running them well, youknow what I mean I mean that
that's that's getting, gettingthe supply side.
That's the hardest part.
Speaker 1 (29:15):
Absolutely so okay, yeah, I love that idea.
So one other company that wedidn't really dive into much is
you solar.
So what do you guys do withsolar?
Speaker 2 (29:27):
So on the solar side we had the idea to again it's
it's more of an intermediarytype of situation right, when
what we do is again it's allcommercial property owners and
it's solar that's going on topof commercial property and what
we do is we take these projectsout to five or six different
(29:49):
installers, right, and we bidthe installers and we come back
and put together the IRRs andcome back with the lowest prices
and actually on that sideclients don't even.
There's no cost, even to ourclientele.
They don't pay us.
We actually partner with theinstallers and our compensation
comes from part of just thetotal cost.
So I mean there's reallythere's no risk to our clientele
(30:14):
whatsoever about working withthose guys on that side and they
really just end up with thebest, the best cost to get solar
installation.
Speaker 1 (30:26):
Well, I'm going to tell you what, jake, I'm pretty
impressed by you.
This is.
This is awesome that you youhave so many different avenues
that you can help people.
Obviously, being in theindustry for 15 years, you have
a lot of knowledge andexperience.
People, obviously, being in theindustry for 15 years, you have
a lot of knowledge andexperience and have made all the
moves in order to make sureyou're helping your customers
the best way possible.
When people want to get in touchwith you.
What's the best way to reachout to you?
Speaker 2 (30:49):
Personally.
You can call me directly or,you know, hit me up on LinkedIn
I'm very easy to find or justthrough the website
ClaptonCapitalcom we're alwaysaround.
Speaker 1 (31:00):
And that's C-L-O-P-T-O-N, capitalcom.
Speaker 2 (31:04):
There you go.
Speaker 1 (31:05):
Jake, thank you so much for joining us.
It's been a pleasure having youon today and please reach out
to Jake if you have any need forreal estate financing on your
next commercial project.
Real estate financing on yournext commercial project, like
you said, it can help you outwith bridge debt, you know
construction debt or just youknow traditional fixed rate
financing.
Jake, thanks again so much, sir.
Speaker 2 (31:25):
Thanks so much.
Appreciate it, tony.
Take care you too.
Welcome to another episode of Carolina Commercial
Real Estate Connection.
Today we have Jake Clopton withus.
Jake, thank you so much forjoining us.
Speaker 2 (00:08):
Appreciate it.
Thanks for having me on.
Speaker 1 (00:10):
Yes, sir.
So Jake is a financialintermediary for commercial real
estate.
Jake, can you tell us a bitabout how long you've been doing
this and what got you into that?
Speaker 2 (00:21):
Yeah, I've been doing this for 15 years.
That's when I started thiscompany 15 years ago, uh, which
you put the timeline backtogether.
That was during the financialcrisis, when there was credit
crisis and nobody was lendingand the idea was to start a
company to help people findfinancing.
So you can kind of see wherethe need came from, um, and
before I did this, I was tradinginterbank hedging product
(00:45):
futures, mainly three-month livewargles with Fed funds, stuff
like that.
That market kind of disappearedalong with a lot of other stuff
, and you know, we had the ideato help people find liquidity.
And here we are 15 years later.
Speaker 1 (00:59):
That's amazing.
So in the beginning, and whatis first of all, what's the name
of your company?
Could you tell?
Speaker 2 (01:05):
everybody Clopton.
Speaker 1 (01:06):
Capital, clopton Capital, okay, and you are
located out of Chicago.
That's right, he does worknationwide yeah we are
nationwide Just be aware of thatIn Carolina, awesome, awesome.
So tell me in the beginning,what was your main line of
business when you started out?
(01:27):
I know you're saying finance.
What type of deals were youfinancing in the beginning?
Speaker 2 (01:32):
Yeah, in the beginning.
So the idea in the beginningwas, because of the time period,
right, nobody could even findmoney.
Time period, right, nobodycould even find money.
So we were less concerned withlike just going and finding
deals, as the main focal pointwas just going and finding money
right, that people were lendingand anybody that was lending
(01:59):
and finding things that theywere lending on, and then
putting that out there andtelling the universe, hey,
here's what we have to lend anddeals would just come to us
because of that, because, I mean, barely anybody was lending at
all, right, so if you had money,people would just come to you.
Since that time, like, our focusis really like deals that are
(02:19):
well, my personal focus let mepreface this better is deals
that are $2 million and up Fixedrate first mortgages, bridge
loans and construction loans.
However, we do also have asmall balance platform from like
$100,000 up to $2 million,mainly geared towards like
residential, small, commercial,multifamily type investors for
(02:41):
the same stuff, fixed rate firstmortgages, bridge and
construction type investors forthe same stuff fixed rate first
mortgages, bridge andconstruction.
That's more of like almost likea fintech type platform.
It's very streamlined, but theside that I do, which is very
hands on.
Brokering of larger financingis really two million bucks and
most of the volume happensanywhere from two up to like 50
(03:02):
million volume happens anywherefrom two up to like 50 million.
Speaker 1 (03:09):
Okay, so let's walk through this on your ideal
customer and kind of to identifysomeone out there looking for
financing to see if they're aproper fit.
What are you looking for whenyou have a client come to you
looking for debt coverage?
Let's focus on building anddevelopment.
Speaker 2 (03:26):
Yeah, yeah, absolutely.
So we work with a lot ofdifferent clientele anybody from
just independent owners withone-off property or all the way
up to like you know, largercommercial real estate companies
with acquisitions officers.
Our ideal guys are somebody thatwants the widest amount of
(03:48):
access to as many debt providersas possible to get the best
terms.
To give you an example when anormal person who's just a real
estate owner and operator goesout to the market and let's just
talk about banks, for instance,they go out and say, hey, I'm
going to try to get a bank loan.
How many banks do you thinkthey really end up talking to?
Three or four, maybe at most.
(04:10):
Right, I mean pretty, prettyhard to get actually through
those guys and then also figureout like do they actually lend
on this property and you know,you may talk to a handful of
banks and come up with maybe onefirm sheet.
We take a much wider net cashapproach.
Our process is very efficientand we've just been doing this
for so long.
Some of these deals we'retalking to upwards of 150
(04:31):
different banks on any one dealInside of those banks.
We talked about three to fourdifferent loan officers inside
of each bank.
Every time you approach a loanofficer at a bank, you may get a
different answer from adifferent loan officer.
That's why we approach multipleof them.
Just today, I had one loanofficer at a bank tell me yes
and another one told me no forthe exact same deal.
(04:53):
It's just how they're feelingthat day, I guess.
So our ideal client is somebodythat wants to look at us as a
service provider to find themthe best capital out there, and
maybe they really need to focuson doing more deals and the
acquisition side and really need, like an outsourced finance
(05:14):
department, to take over thattime constraint.
That's what we do.
Speaker 1 (05:20):
Fantastic.
So let's understand a littlebit of your advantage,
comparatively speaking tosomeone going and dealing with
their local regional bank,giving you about a reach of 500
people, potentiallyunderstanding what you're saying
when you're doing a reach outinitially, compared to someone,
(05:50):
yeah, going talking to three orfour banks.
So, terms wise, are your terms,obviously, when you're shopping
that much you're able to offer,I'm assuming, better terms than
these regional banks typically.
Or is it just finding finance?
So someone that's not soexperienced and maybe he's only
(06:10):
done one or two deals andthey're looking for a third
build and let's just give anumber of 5 million on a full
development deal, so they'veacquired a piece of property,
what criteria are you lookingfor?
Does it need to be pre-leasedif they're wanting to do like an
industrial or retaildevelopment?
Walk me through that process.
Speaker 2 (06:32):
Sure, so I'll handle the first part of that question.
As far as advantages, right, Ithink you can think about it two
ways.
One, it's a two degree, it's anumbers game.
Let's say there is one optimal,you know, or the most
competitive, just deal out there, right, the lowest interest
rate, the odds of finding thatby only going to a couple of
(06:54):
banks, not very good.
Right, so we provide a muchbroader access to the market.
So just logically, you can seehow you know accessing better
terms would be done through thatway.
Right, accessing a lot morelike lenders that are out there
to you know.
I would think the other way isyou know expertise and
(07:14):
presentation and knowing wherethese banks can push you know,
just knowing how banks work andknowing what, what types of
terms we're getting from otherlenders in the markets, can help
us push banks and push them alittle bit harder.
And also we're an advocate forthe borrowers, so we can be a
little more aggressive withthese lenders than maybe the
(07:37):
borrowers want to be, becausethey're going to have a long
relationship with them goingforward.
So we can push a little harderon terms and you kind of get
these guys to open up a littlebit more and offer terms that
maybe they wouldn't if they wereworking directly with a
borrower.
So I think those are really twoof the big advantages that we
bring to the table.
As far as what type of dealswe're looking for, it kind of
(08:00):
depends on property type andwhat it is.
We do basically every propertytype, from multi-family um to,
you know, industrialself-storage, uh, which are
doing a lot of car washes,hotels, stuff like that.
Releasing is something wetypically are looking for in,
(08:20):
like retail development today,right.
So anything that that wouldn'tbe pre-leased would be
speculative.
I don't need that withmultifamily, clearly, really
don't need that with other stufflike storage, car, you know,
hotel, stuff like that.
But if we're talking aboutindustrial and retail, certainly
you know having pre-leasinggoing in is a huge advantage.
(08:42):
If you're gonna end up havingto do it spec, it's probably
just going to result in a lowerleverage point and more equity
going in to mitigate that riskfor the lender.
Speaker 1 (08:53):
Interesting, and so hotel multifamily.
Obviously you had nopre-release and going in makes
it a lot easier.
So we look a lot at retail andindustrial and, yeah, that
that's the biggest hurdle, youknow.
What about?
You know, looking at theindustrial, do you guys ever
deal with it in a speculativeterm and phasing it out?
(09:15):
So if we're looking at, youknow, let's say, a 60,000 square
foot industrial development andwe're just doing small bay flex
, you know, so those you mightpre-lease one or two spaces on
like a six unit building beforeyou break ground not going to
cover your net debt ratio.
So then something like that,what are the terms going to end
(09:37):
up looking like on a speculativebuild like that?
How much?
What's your leverage basis?
Speaker 2 (09:41):
Yeah, absolutely.
I mean a lot of this depends onwhat sub marketmarket you're in
, right, let's say we'rebuilding some industrial
building and a market whosevacancy is basically zero,
you're going to get a lot morepeople comfortable If you're
doing something that's a littlemore pioneering like, for
instance, I've seen a lot ofindustrial builds wanting to do
(10:03):
small bay stuff that in some ofthese markets is kind of
pioneering, right, and theythey're building it because
there is no supply for small bay.
But you know it's not reallyproving.
You know that there's a hugedemand for it.
I think you can make thatentrepreneurial like decision.
But you know banks still reallyyou know work on a profile right
.
They're mainly going to go offof what data is already in the
(10:23):
market.
If you're going to buildsomething speculative, typically
I see you know lenders start toget comfortable around like 60
to 65%, just a little bit lowerLTV.
So that you're right, I meanthey can hit debt service
constraints a little bit earlierand that there's more equity in
these things going in.
Just in case you know yourassumptions don't work out
(10:44):
exactly how you thought, there'sa little bit more panic going
in.
Speaker 1 (10:49):
And for someone that's looking at that, what
type of prerequisites shouldthey be prepared to bring to the
table for you to even, you know, start working as a client for
them?
Do have they had?
Have they had to have asuccessful track record of
developing and buildingsomething?
What if they are new to it?
Speaker 2 (11:09):
So typically we do see people that are building
things have a track record.
We do work with, you know,first-time developers and a lot
of times the way we're able toget around that kind of lack of
development experience is byputting together the right team
right.
So let's say, the developerscome in and say, hey, I think
it's a great idea to build someyou know small bay industrials,
(11:32):
for instance, but they have notrack record of development.
Well, we can put together or,like you know, work with them to
put together the right teamRight.
Maybe you get a GC that has arock solid GMP and they've got a
ton of experience.
And then also there's otherpeople on the team you know that
you know have tons ofexperience that they're able to
bring on as consultants fordevelopment.
(11:53):
So you can kind of build outthis kind of sphere of influence
of people with experience tomake up for that.
But at the end of the day thatis still going to be a little
bit of a concern.
I do see private lenders get alittle bit more comfortable with
just project level economicsand stuff like that, maybe with
(12:17):
a little less development,getting more comfortable with
the general contractor or theconstruction company that's
building it, especially puttinga third-party management company
in there that knows whatthey're doing.
So if that does become an issueusing a lot of lower cost of
capital lenders like banks,there may very well be some
private lenders that would pickit up.
Speaker 1 (12:39):
Fantastic.
So what he's basicallyspeculating on saying is here
he's telling us you know you'vegot to get a good resume put
together.
So when you put this teamtogether, if you're new at it,
you want to get someone with aresume already doing property
management or somebody that'salready developed or raised a
bunch of capital.
You're going to put that resumetogether.
You can get on the deal.
But you're going to need to geta couple of teammates that have
(13:00):
done something would give youthat first passage into the deal
and putting that resume of acouple of experienced team
members with you.
You might not get the full deal, might not get as much, but you
get that leverage of experienceto get the deal to go through
and then you know you can buildfrom there.
Speaker 2 (13:17):
Exactly Like saying hey, I don't have as much
experience, but my GC, it's gota ton of experience.
They have a huge balance sheet.
They're guaranteeing it getsbuilt as soon as the thing gets
built.
You know, here's my managercompany.
They've got a ton of experiencein the exact project.
They're taking over theoperations of it.
Stuff like that we can point toeveryone involved here that is
(13:40):
building or managing has a tonof experience in what they're
doing.
I think that says a lot.
It goes a long way.
Speaker 1 (13:47):
And how are you seeing the market today?
Are you having a lot of dealsgo through?
Are you hitting a lot ofroadblocks with stuff coming
through?
Speaker 2 (13:56):
We are getting a lot of stuff done.
Yeah, we're doing a ton ofconstruction right now for just
various assets.
That seems to be a lot of whatyou know where people are
finding value is, you know, newconstruction.
You know, in addition to that,we are doing just your typical
refinances and acquisitions.
(14:16):
But I think people are stillhaving a little trouble making
those numbers work on theacquisition side because of the
cost of capital.
So a lot of what we're doingtoday is construction or maybe
some value-add bridge.
As far as our deals a littlemore difficult, I would say.
There's definitely morescrutiny than there may have
been in the past, for sure, andyou have to do a little bit more
(14:40):
legwork to find the rightcapital sources to get people to
say yes, to get the deals done.
But we're absolutely busy andwe're absolutely getting stuff
done.
Speaker 1 (14:50):
Now, how are you guys ?
How is it when someone comes toyou at a capital stack where
they've got you know wherethey're doing it as a GP role
and they're bringing on limitedinvestors?
What are you doing?
Structuring deals that havepeople coming to you with that
mindset, where they're bringingprivate investors, they might
not be putting a lot of moneyinto the deal themselves.
(15:13):
How do you guys work throughthat?
Speaker 2 (15:16):
It's a good question.
So I deal with this a lot.
Right, we do a lot ofsyndicated GPLP equity
structures.
A lot of the direction we godepends on what the GP is
comfortable with.
You know, a lot of times theGPs do sell their LPs on, you
know, lower cost bank debt,which means recourse.
So if we're building somethingand the GP needs a bank loan and
(15:39):
it's got to be recourse,they're going to be on the hook
for the whole thing, even thoughthey may not with the first
deal.
But if you have a syndicatorthat's doing multiple successive
deals, you can see how, ifthey're guaranteeing the whole
(16:01):
loan but only owning a smallportion of the property, that,
like, their liabilities start tokind of outweigh their assets
pretty quickly.
So that does become a problemeventually.
The other issue there is globalunderwriting.
All these banks are going to doglobal underwriting on you as a
GP, regardless of yourownership of the property itself
(16:24):
, because you're guaranteeingall the debt.
So that does become an issue aswell.
So we do see a lot of times, ifyou know, with syndicators
again doing multipleconstruction deals or value add
deals that have, you know, nocash flow going in right, but
they do have these you knowliabilities out there that need
to get paid.
That can become an issue too.
When those things start tobecome an issue, most of the
(16:49):
syndicators I see turn toyourecourse debt, something
that's more contained on a perproperty basis, where these
lenders don't have to go intotheir global underwriting just
to make this deal work.
We do see that happen, probablylike the third or fourth deal
(17:13):
that's going on at the same timeis a need to start pushing
towards non-recourse debt, andthat's in the private capital
markets.
So that's where you're going tofind that type of stuff and
that's really where it's built.
You know the first question.
I asked somebody to reallyunderstand which direction to go
to right, because our capitalsources are banks, credit unions
(17:33):
and private debt funds for themost part.
I mean, yes, insurancecompanies and stuff too, but as
we looked at it in pie chart,the vast majority of it is banks
, credit unions and private debtfunds.
When I'm trying to determinewhich direction to go, the first
thing I ask is what does yourequity look like?
And if their answer is, oh,we're doing a GPLP, chances are
(17:59):
we're going to a private debtfund.
That's not true for everybody.
I do a lot of work for a coupleof real estate companies and
we're doing the exact opposite.
I mean it's GPLP and it's allbank debt stuff like that, and
we're definitely making thosedeals work.
It may take reaching out tomore banks to make those deals
work, because some of them justdon't get comfortable with the
globals.
Speaker 1 (18:19):
Yeah, and I've seen you know talking to a lot of
different indicators.
I've been amazed to see youknow their debt ratios.
They're, you know, three, fourhundred times their net worth on
debt and I don't understand howanybody's lending to them when
you've got that much.
Because, yeah, if somethinggoes awry, what does it matter?
(18:42):
They don't have the money andthey're signed on the debt.
Well, what does it matter?
I mean, I don't understand howanybody lends on them when they
start doing that.
Speaker 2 (18:53):
I mean it's.
You know you've got it'ssecured by an asset too, right,
so that's your first line ofdefense.
But they're really these banksare leaning on people not as
much for to just say like, oh,we'll take back the property.
What they're really after is,if there's an interest rate
(19:15):
deficiency, they want somebodyto come in with money.
Right, an interest paymentdeficiency, they want somebody
to come in with money.
And that's what they're lookingfor.
That's what they're looking forfor this guarantor Saying hey,
if this property is not makingpayments, we're looking at you
to come in with the payments.
Not necessarily.
So I mean, I think some peopleapproach it where you know,
(19:37):
whatever, sure, I'll sign on it.
But you know, you know pushcomes to shove, they're just
going to take the property.
But that's not necessarily whatthey're after.
You know, right off the bat.
I mean, eventually that willhappen, right?
You know scenarios where peopleyou know have been syndicators
(19:58):
and built up large portfoliosand have them collapse quickly
because you know you startgetting a couple of days that go
bad and it depletes yourconfidence very quickly.
Speaker 1 (20:05):
Right, and when you're that far upside down,
it's you definitely don't,wouldn't have the money to cover
those issues.
Speaker 2 (20:14):
So right, If you have a million bucks in the bank,
how many $10 million deals doesit take to go bad before you're
done?
Speaker 1 (20:29):
Right, not many.
So let's talk a little bitabout other stuff that you do.
So you not only do the lending,you guys also do some other
items.
So one of the things isinsurance.
So what type of insuranceservices do you provide?
Speaker 2 (20:37):
So I'll give you the thesis behind here, right?
So we started out as justcapital markets doing financing.
And several years back the ideawas, hey, we have at the time,
10 years worth of contacts ofcommercial real estate owners.
How else can we help these guysout?
And I took a look at a closingstatement of a deal and I was
(21:00):
like, well, first, right off thebat, there's insurance, and a
lot of times that fits reallywell in with financing.
Right, because it's a seriouscost, it's got to get done.
Insurance works hand in hand tothe lenders.
So we built out an internalcommercial property insurance
company and what we do isproperty and business insurance
for any commercial properties.
(21:21):
And what we found, especiallyrecently now, is there is a huge
need for people to approachinsurance differently.
I think for a very long timepeople were just the insurance
was an afterthought, like yeah,you got to have insurance.
I don't really understand thatwhole thing.
(21:42):
You know we just get a guy andhe gives insurance and it renews
every year, um, but what we'reseeing now is, you know that,
like kind of sitting back andjust taking those renewals.
It's not three or five percent,it's like three days before
your renewal it went up 150%,right.
So the days of just sittingthere with auto renewals, they
(22:04):
are over.
Especially in, let's say,florida.
That property insurance marketis just upside down.
Yeah, the.
Speaker 1 (22:12):
Carolinas is tough too.
I mean in Florida.
We've heard that you can't evenget insurance on these.
Speaker 2 (22:17):
A lot of people can't Try to get flood in Florida.
We've heard that you can't evenget insurance on these.
A lot of people can't try toget flood insurance in Florida.
Speaker 1 (22:20):
Yeah, and here in the Carolinas, I mean, it's doubled
.
So it's definitely something tobe conscious and aware of when
you're underwriting a property.
Speaker 2 (22:31):
Anywhere there is flood or wind.
Speaker 1 (22:36):
Yeah, those areas are getting I mean basically
anything cold, right right,those areas are getting tough
yeah and so you know is it, areyou guys able to connect with
all the carriers I get?
Speaker 2 (22:49):
I assume you're being in the area again on that, yeah
, so it's very similar to thefinance side, right, I mean
we're anary, we're an agent onthat side, so it's extremely
similar.
It's just the insurance marketis just much less transparent
than the finance side, but theprocess itself is pretty similar
.
And, yeah, I mean we have widemarket access.
(23:11):
And what we do quite often whathappens is we'll get somebody
that says, hey, I've been withthis agent for 10 years and it's
usually a pretty big company,maybe like a top five, top 10
company, and we take businessfrom those guys all the time.
Right, because if you're at acompany like that and you know,
let's say, you have like a$20,000 insurance policy,
(23:32):
honestly they don't really care,they don't really care about
that.
I mean they're just they're'treally care, they don't really
care about that.
I mean they're just they're notreally going to do a lot of
work to market it for you, youknow, year over year.
And so we quite often, you know, are doing wide marketing, you
know, for those types ofpolicies and we've taken people
from getting thinking they weregetting 100% increase to either
(23:52):
par or sometimes we've actuallybeen able to lower the rent.
It just takes the effort ofdoing it and you shouldn't just
take for granted that you'rethinking that your agent is
going to go out and market yourdeal every year.
They're not going to, they'rejust going to auto-renew it and
that's just kind of a disserviceand if you're on of that type
(24:14):
of path, you're going to end upwith really high insurance rates
.
Speaker 1 (24:19):
Now, and do you also do?
Did you say, you do businessinsurance as well?
Speaker 2 (24:23):
Yep, Any commercial insurance, property general
liability.
So we do a lot of hotels andstuff too, so you get a lot of
just general liability and workscomp and all that stuff in
there Anything that's businessor commercial insurance.
Speaker 1 (24:36):
That's awesome.
Anything that's business orcommercial insurance, that's
awesome.
And then another thing that youguys are doing that we were
discussing is you're working asa 1031 intermediary as well.
Is that correct?
Speaker 2 (24:44):
that's right.
Yeah, we are.
We are the actual qualifiedintermediary you guys got.
Speaker 1 (24:51):
You got a hands and a bunch of stuff here so, yeah,
what we're trying to do is be Bea one-stop shop.
Speaker 2 (24:59):
Right throughout the life cycle of property right.
So we're working on adding abrokerage side.
That's definitely a tougherbusiness than adding a 1031 QI,
but what we want to do is beinvolved from acquisition,
financing, insurance, all theway to disposition and then
(25:21):
transitioning from like, a 1031deferred exchange back into
another property right.
I mean, that's the ideal ofwhat we're looking to be able to
do.
Speaker 1 (25:31):
So in your brokerage, where is the?
Are you trying to go nationwidewith a brokerage side, or are
you just trying to be in Chicagoarea?
Speaker 2 (25:38):
No, no, no.
Everything we do is nationwide.
That's been the strategy fromthe beginning and it's got to
continue it.
Speaker 1 (25:44):
So interesting.
You seem to have a greatbusiness mind and business model
.
Do you work under any type ofbusiness philosophy?
Do you use EOSos likeentrepreneurial operating system
for your business, or how doyou run and operate your
business?
Do you use any certainoperating system when you with
your business?
Speaker 2 (26:05):
um, everything we do has just been put together
through experience over time.
I guess is the best way to sayit.
The way that we run things likeinterdepartmentally, like
there's no employees, you knowwe put together the different
(26:27):
departments right, likeinsurance or 1031 or solar and
all this stuff.
They're all you know.
Everybody that works for thesehas an active stake in
performance.
They're all owners of thoseindividual departments but it
all rolls back up to theumbrella company, platt Campbell
.
Speaker 1 (26:57):
I think that type of structure works the best to keep
everybody motivated and to giveour clients the best service.
Speaker 2 (27:01):
That's fantastic.
Speaker 1 (27:02):
Plus, also, I don't want employees.
Oh gosh, employees are tough.
I got a lot, but they're allgreat, everybody's great
employees here, so I canunderstand that layout, I think.
So what you're saying is you'rebasically almost a co-op of
companies all put together, inessence, partnering all with the
(27:25):
same aligned vision and purposeso you can help everyone
through the process, and it'sbasically a team membership
where you're basically referringand tackling everything all
under one branding, but they'reactually separate companies.
Speaker 2 (27:41):
That's right, and they need to be set up through
different entities because thereare different licensing for
each one of these things.
As it is regardless, so that Imean just the way that it needed
to be anyways works the bestfor what we wanted to set up.
Speaker 1 (27:54):
Well, that will.
I think that makes more sense.
I was like, goodness gracious,you guys are doing more sense.
I was like, goodness gracious,you guys are doing all these
things.
How do you niche down?
But it sounds like what we'retalking about is they're
specifically, they've got peoplethat are niched down in each
one of these areas and that'stheir sole focus, and then
they're cumulatively workingtogether so they can keep you
(28:16):
streamlined as a company andoffer you all the services.
Speaker 2 (28:19):
Exactly right, which sounds better to me than doing
it all under one umbrella.
Yeah, that's exactly right.
I mean, I definitely learnedvery early on trying to do too
many things yourself means youcan't do anything.
Well, so I really want to runone race, really right, Just
finance and then use thecontacts that we built through
(28:43):
finance to basically cover allof the supply and marketing side
of the other companies.
Right, and that's really likethe hardest thing, right, I mean
, well, you know, gettingbuilding trust, authority and
contacts and network, and oncewe have that built out, you know
, I mean you just it's reallyjust setting the other companies
(29:06):
up and running them well, youknow what I mean I mean that
that's that's getting, gettingthe supply side.
That's the hardest part.
Speaker 1 (29:15):
Absolutely so okay, yeah, I love that idea.
So one other company that wedidn't really dive into much is
you solar.
So what do you guys do withsolar?
Speaker 2 (29:27):
So on the solar side we had the idea to again it's
it's more of an intermediarytype of situation right, when
what we do is again it's allcommercial property owners and
it's solar that's going on topof commercial property and what
we do is we take these projectsout to five or six different
(29:49):
installers, right, and we bidthe installers and we come back
and put together the IRRs andcome back with the lowest prices
and actually on that sideclients don't even.
There's no cost, even to ourclientele.
They don't pay us.
We actually partner with theinstallers and our compensation
comes from part of just thetotal cost.
So I mean there's reallythere's no risk to our clientele
(30:14):
whatsoever about working withthose guys on that side and they
really just end up with thebest, the best cost to get solar
installation.
Speaker 1 (30:26):
Well, I'm going to tell you what, jake, I'm pretty
impressed by you.
This is.
This is awesome that you youhave so many different avenues
that you can help people.
Obviously, being in theindustry for 15 years, you have
a lot of knowledge andexperience.
People, obviously, being in theindustry for 15 years, you have
a lot of knowledge andexperience and have made all the
moves in order to make sureyou're helping your customers
the best way possible.
When people want to get in touchwith you.
What's the best way to reachout to you?
Speaker 2 (30:49):
Personally.
You can call me directly or,you know, hit me up on LinkedIn
I'm very easy to find or justthrough the website
ClaptonCapitalcom we're alwaysaround.
Speaker 1 (31:00):
And that's C-L-O-P-T-O-N, capitalcom.
Speaker 2 (31:04):
There you go.
Speaker 1 (31:05):
Jake, thank you so much for joining us.
It's been a pleasure having youon today and please reach out
to Jake if you have any need forreal estate financing on your
next commercial project.
Real estate financing on yournext commercial project, like
you said, it can help you outwith bridge debt, you know
construction debt or just youknow traditional fixed rate
financing.
Jake, thanks again so much, sir.
Speaker 2 (31:25):
Thanks so much.
Appreciate it, tony.
Take care you too.
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